The UK economy is facing a challenge as it experiences a shallow recession last year, according to official figures released by the Office for National Statistics. This poses a problem for Prime Minister Rishi Sunak, who must reassure voters of the safety and stability of the economy before an expected election later in the year. In the third quarter, GDP contracted by 0.1%, and in the fourth quarter it decreased by 0.3%. While there are indications that the economy started 2024 on a stronger footing, with GDP growing by 0.2% in January and continued growth in February and March, there is still a long way to go in recovering from the impact of COVID-19.

Despite these challenges, there are some positive signs such as growth in households’ real disposable income and increased savings as the savings ratio rose slightly in the final quarter of last year. The Bank of England has hinted at cutting interest rates as inflation approaches a point that would allow for such a move. However, despite this, official budget forecasters anticipate only a 0.8% expansion this year while Britain’s economy only grew by 0.1% in 2023, marking its weakest performance since 2009 during the global financial crisis excluding major setbacks caused by COVID-19 pandemic in 2020. The value of British pound remained relatively stable against major currencies like US dollar and euro after these figures were released.